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Industry Analysis and Security Consulting

When UP is Better Than RIGHT

The following excerpt is from UP and to the RIGHT: Strategy and Tactics of Analyst Influence, 2nd Edition. (That’s right look for a 2nd edition to UP and to the RIGHT, coming late 2017.)

There is a cadence to every journey UP and to the RIGHT in the Magic Quadrant. And that cadence is different for every vendor and the journey can take many diverse paths.
The team responsible for charting the course UP and to the RIGHT is under tremendous pressure to achieve results. No board or senior executive will be happy until the only dot in the Leaders Quadrant belongs to them, or at the very least, their dot is the highest and farthest to the RIGHT.
Before discussing the value of UP versus RIGHT it is important to reiterate the difference in perception of MQs between the participating vendors and the ultimate buyers on which the MQ exerts so much influence.
Vendors tend to completely stress out over relative positioning and changes from one year to the next. Buyers look at MQs only in terms of the most current version and spend very little time parsing the nuances of which vendor is positioned in what way compared to the others.
Buyers are not stupid. They look to the MQ to validate and support their choices for short listing. They may talk to every Leader and short list a few of them for trial or proof of concept. In specific regional or vertical niches they will also talk to Niche vendors. If they are a big IBM (or Oracle, or SAS, or CA, or HPE) shop they will choose a Challenger.
To a buyer a vendor’s position in the current MQ is immediate validation. Typically they are completely unaware of the history of the path a vendor has taken to get where they are. They look at the position, they read the description and the Cautions, and make their decision on which to talk to.
Meanwhile vendors spend inordinate amounts of time and effort sweating about the deltas from year to year. While I have articulated a strategy of planning that movement, because without a plan you have no MQ strategy, it is still important to recast that strategy every year as the die is cast and the dots are placed.

DISRUPTION

In every technology industry there is a cycle of disruption. The innovators disrupt the established order with a technology that gets the job done better. Their journey involves displacing the established order. By engaging and influencing Gartner they can accelerate disruption if they can convince the analysts that they are 1. visionary, and 2. they have demonstrated momentum.
But the current day Gartner analyst is often as conservative as their own client base. Gartner has often admitted that their own client base consists of primarily late adapters. They don’t want to change. They want to make safe decisions. They are not risk takers. If an analyst is actually visionary, if he or she has that Ah Ha! moment: this is the way the entire industry has to go, they risk everything by declaring so. This leads them to couch everything in terms of gradual changes and hope that the disruptive technologies being introduced will conform to the old way of doing things with minor enhancements.
In this way Gartner has often gotten it wrong. From networking to desktop operating systems they have missed predicting the waves of the future.
Every vendor that sets out to disrupt an industry hungers for a visionary analyst that will “get it” and help change the world by jumping on board early. That rarely, if ever, happens. The analysts have to be led the whole way. This is the reality of dealing with industry analysts, a reality that must be incorporated in an analyst relations strategy.

VISION Versus Ability to Execute

Now we turn to a specific path that a disruptive vendor takes to market leadership. Early success for a disruptive technology, especially if it generates sufficient industry buzz, gets recognized by the Gartner analyst. The most important driver for this recognition is inquiries from the Gartner client base. Early adapters (there are a few) report success with the new technology: cost savings, effective deployments, better performance, even displacing the incumbents altogether.
When the exhaustive MQ questionnaire is submitted it turns out the innovator qualifies for inclusion! It may make its first appearance as a Niche vendor to watch or even as a Visionary. That inclusion should be leveraged as much as possible. The sales and marketing team can use inclusion in the MQ to open doors and at least start conversations. If the written commentary is positive too, the MQ can open doors to trials and eventually sales.
The real opportunity for any disruptive vendor is when its dot on the MQ starts to move upwards. This indicates that subsequent results as reported through the NDA protected questionnaire demonstrates growth in revenue, customer acquisition, partnerships, and channel participants.
Never forget that the “vision” axis of the MQ represents the Gartner analyst’s vision, not the vendor’s vision. In other words a disruptive vendor, one that is actually changing the makeup of an industry will not always be properly identified as the most visionary. That slot is held for the vendor whose products most closely match where the industry analyst sees the industry going. And analysts get it wrong. A lot.
But ability to execute, the vertical MQ axis is somewhat more objective. It includes real reported revenue. (Keeping in mind that some vendors lie. One network security vendor reported revenue based on list prices for years; in other words what customers might have paid had there been no discounts. That presented a particular problem for the new CMO who had to bring their reported revenue in line with reality at some point.) Ability to execute also takes into account geographic expansion, funding, marketing and sales team growth and investment in product development.

UP over RIGHT
The key to understanding the value of vertical placement versus horizontal placement is understanding the buyer’s perspective. A CIO or whoever must make the vendor choice does not look at the history of previous MQs. He or she looks at the current one. Almost by definition, this is a person who is relying on a two axis chart to make important buying decisions, and they are going to be conservative, late adapting, typical Gartner clients.
The first impact of placement on the MQ is whether or not a vendor has crossed the line into the upper right quadrant, the Leaders Quadrant. Being there means a good shot of being short listed for at least a meeting–a chance to make a sale or at minimum progress to the bake-off or Proof of Concept phase.
The second impact is validation. A buyer is leaning towards a new vendor, one which can displace the old technology that is not working. Here Ability to Execute is everything, while Vision can be a detractor. A buyer, especially a late adapter, is not looking for vision, whiz-bang, cutting-edge, or change everything technology. The buyer is looking for a viable solution that will be the least disruptive to their current organization. The higher the vendor places in Ability to Execute the better the validation the MQ provides.
This is why a vendor should not strive to be the most visionary. Demonstrated ability to execute is a much stronger indicator to the buyer that they are making a good decision. Gartner backs them up. Leave the “most visionary” position to the startup that happens to match the Gartner analyst’s perception of where the industry is going. Push that dot up rather than over. Get into the Leaders Quadrant early. As soon as that happens the disrupting vendor is on the same footing as the industry dinosaurs and only has to deliver to succeed.